Why I shorted NIFTY today at 3:20 PM again!
Background or Context
I have posted my crazy short (below) which completed its run to the target in just 1 day. Then there was 3 day of consolidation. So far in strong up market, NIFTY has always bounced from such dips forming consecutive higher highs. This has happened with momentum. This time, the momentum is lacking. In bearish trend, bull patterns fail and in bull market bearish pattern fail. There was ascending triangle bottom formation which failed today. In common sense term, NIFTY made high , but could not sustain it.
Idea
NIFTY is likely to show follow up move. How deep at this point I dont know. This is second leg down, so one one needs to be cautious. The best combination would be a gap down . First target is going below 11450 and then 11400.
What can go wrong
Currently SGX NIFTY is indicative some losses. US markets are down. So trade is looking good overnight. Now if this reverses overnight, that is an alert sign and I'll get out of the trade.
NIFTY shows lot of red, but gap get bought.Then also, I'll likely to close trade in first few hours.
NIFTY actually starts going up and makes new high and sustains. The first warning is sustaining above 11565 for 1 hour.
NIFTY does not move and PUT option losses premium. This is worst case and I'll close the trade by EOD tomorrow.
Overall, if all these risks are assumed, the trade looks good. Hence
I bought 10500 PUT @ 92 Rs
SL : 50 RS (approx 1 hr above 11565) or EOD
Target : 150 +
In this strategy target gets updated and stop loss is trailed.
I have posted my crazy short (below) which completed its run to the target in just 1 day. Then there was 3 day of consolidation. So far in strong up market, NIFTY has always bounced from such dips forming consecutive higher highs. This has happened with momentum. This time, the momentum is lacking. In bearish trend, bull patterns fail and in bull market bearish pattern fail. There was ascending triangle bottom formation which failed today. In common sense term, NIFTY made high , but could not sustain it.
Idea
NIFTY is likely to show follow up move. How deep at this point I dont know. This is second leg down, so one one needs to be cautious. The best combination would be a gap down . First target is going below 11450 and then 11400.
What can go wrong
Currently SGX NIFTY is indicative some losses. US markets are down. So trade is looking good overnight. Now if this reverses overnight, that is an alert sign and I'll get out of the trade.
NIFTY shows lot of red, but gap get bought.Then also, I'll likely to close trade in first few hours.
NIFTY actually starts going up and makes new high and sustains. The first warning is sustaining above 11565 for 1 hour.
NIFTY does not move and PUT option losses premium. This is worst case and I'll close the trade by EOD tomorrow.
Overall, if all these risks are assumed, the trade looks good. Hence
I bought 10500 PUT @ 92 Rs
SL : 50 RS (approx 1 hr above 11565) or EOD
Target : 150 +
In this strategy target gets updated and stop loss is trailed.
Trade closed: target reached:
Trade closed on Sept 9.